New Delhi: Prime Minister Manmohan Singh has called the heads of all Indian airlines for a meeting on Saturday to discuss ways to help the cash-strapped carriers and to resolve other industry issues.
It will be the Prime Minister’s first meeting with airline chiefs in recent years.
“The meeting has been called to resolve the airlines’ financial health and discuss the issues in general,” said an official who will be at the meeting.
The invite from the Prime Minister’s Office (PMO) came on Wednesday and the meeting was firmed up on Thursday.
Jet Airways (India) Ltd’s Naresh Goyal, InterGlobe Aviation Pvt. Ltd’s Rahul Bhatia, and Kingfisher Airlines Ltd’s Vijay Mallya are expected at the meeting.
“All the promoters have been called. All the airlines are losing money. If something is not done...everyone will fall by the wayside,” said a second official. “It’s at the highest levels and the first such in recent memory.” Both officials declined to be identified.
Singh said last fortnight on his way back from a summit in the Maldives that he will find “ways and means” to help Kingfisher Airlines, which has had to cancel scores of flights because of a cash crunch.
The main opposition Bharatiya Janata Party responded to Singh’s announcement by saying it was against any government grant or bailout to a private airline.
The Federation of Indian Airlines (FIA) sent a plea to the PMO this year seeking Singh’s intervention on pricing of airfares and high jet fuel taxes. The PMO, in turn, sought the views of the civil aviation ministry on the matter.
The Saturday meeting is expected to discuss allowing investments by foreign airlines in domestic carriers, a proposal that has gained strength in the wake of Kingfisher’s crisis.
Airlines are divided over the move, FIA secretary general Anil Baijal has said. The federation has not made a formal request to the government on this matter.
Mallya’s Kingfisher has sought foreign airline investment while SpiceJet Ltd in a letter to the aviation ministry has said it will back a 24% stake sale to foreign airlines, Mint reported this month.
India’s three listed carriers—SpiceJet, Kingfisher and Jet—announced a collective loss of Rs 1,500 crore in the second quarter because of a sliding rupee and a rise in fuel prices. All the airlines together have a debt of Rs 80,000 crore on their books.
Some are sceptical of the Saturday meeting.
“What will they discuss? It’s such a divided house,” said the first official quoted above. “Some will not even show up.”